I hear this critique a lot and I used to believe it more but now I think it's just too facile. It's true that VCs have a lot of room for improvement in essentially doing fraud detection. They do a disservice to their LPs and probably to society at large as a result of this. In fact, that's probably where the misaligned incentive emerges -- VCs have a strong incentive to play the greater fool game and ostensibly were doing that with WeWork before they got their hands caught in the cookie jar.
Having said that, the idea that the solution is fundamental analysis, investing without emotions, or what have you -- that all strikes me as a bit naive and without much evidence. The market is a Keynesian beauty contest first which serves the needs of humans, hence the existence of Veblen goods et al. It also strikes me as a bit naive that there's anything wrong with "charismatic" and "well-connected individuals" being in positions of leadership. Recruiting is the most highly leveraged thing early stage company leaders can do and is the flip side of fundraising -- so it only makes sense to have firm's leader excel at that.
I think we can critique Neumann and Holmes for being unethical fraudsters who deliberately misled their stakeholders without making a categorical error about corporate executives. I won't say that they're the exception and not the rule, but I will say they're not really the goal to aspire to.